Washington at Work; Clark Clifford, Symbol of the Permanent Capital, Is Faced With a Dilemma

By NEIL A. LEWIS, Special to The New York Times

Published: April 5, 1991

WASHINGTON, April 4—
To many, Clark M. Clifford is the political equivalent of the ballplayer who stays in the game long after he is unable to hit a fastball, or the boxer who finds he can no longer duck the blows.

To others, the man who is a symbol of the permanent Washington also stands for something else -- someone who heeds the call to public service and ends up using that experience to enrich himself handsomely.

At a time when he was expected to savor the autumn of a remarkable half century at the intersection of government and the practice of law, with his memoirs to be in the bookstores next month, the 84-year-old vizier of Democratic Presidents and politicians is struggling to uphold his reputation. Mr. Clifford is faced with the dilemma of appearing either to have been duped by Middle Eastern money men or to be guilty of deceiving Federal regulators.

"I have a choice of either seeming stupid or venal," he said with a glum resignation in an interview in his richly paneled office here. 2 Investigations Under Way

The issue is this: Did Mr. Clifford knowingly mislead Government regulators about a bank holding company of which he been chairman for 10 years? The Federal Reserve and the Manhattan District Attorney are both investigating whether the Arab investors in the bank, First American Bankshares Inc., were illegally fronting for the Luxembourg-based Bank of Credit and Commerce International, which has been involved in laundering money for drug dealers.

Federal regulators approved the charter of First American in 1981, substantially on Mr. Clifford's assurances that neither the Bank of Credit and Commerce nor any other hidden interest would be involved.

Denying any knowledge of the link to the Luxembourg bank, Mr. Clifford has been forced to press the embarrassing case that despite having worked successfully all his life to create the notion that no one else could grasp a situation as clearly as he, he had been totally gulled.

"I have been deceived and I view this all with a deep sense of grief," he said, appearing the essence of pained earnestness. "This is the first time in 62 years that I've had any doubt cast on my character, any cloud attached to my behavior." Surrounded by Counselors

The man whose advice was avidly sought by so many corporate and political leaders is now obliged to surround himself with a bevy of counselors of his own. He has lawyers in New York and Washington, as well as a public relations consultant.

Clark McAdams Clifford began as a junior naval assistant in the White House under President Harry S. Truman in 1945, and rose to mastermind Mr. Truman's come-from-behind victory over Thomas E. Dewey three years later.

Mr. Clifford served as President John F. Kennedy's personal lawyer, advising him on public and deeply private matters. As Defense Secretary under President Lyndon B. Johnson, Mr. Clifford's growing doubts about the Vietnam War became the Johnson Administration's and eventually the President's doubts.

Mr. Clifford said it was especially painful that investigation of his role in the bank comes just before the publication of his memoirs, "Counsel to the President." Excerpts of his book, to be published by Random House, have recently appeared in the New Yorker magazine. He has felt obliged to add a footnote. No event in his career, he writes, "has caused me greater anger and outrage" than the bank investigation. Some Well-Timed Luck

People who achieve astounding success like Clark Clifford usually have a variety of gifts, including charm and intelligence, but the mix almost always includes a bit of well-timed luck. Mr. Clifford's good fortune was having a friend from his native St. Louis who had him assigned to the White House as a junior naval aide.

In his memoirs he recounts how his first chores included tasks like redesigning the Presidential seal. The rest of the book is an account of how he went on to affect the institution symbolized by that seal. Indeed, the Washington of today is in some ways a creation of Clark Clifford. He helped shape the modern Department of Defense, the National Security Council, the Central Intelligence Agency and the role of White House counsel.

Mr. Clifford arranged Truman's card games. In one of the most delightful passages in the book, he recounts a poker game with the President and Winston Churchill on a train ride to Fulton, Mo., where Churchill gave his famous "Iron Curtain" speech in 1946. Churchill was a poor poker player, but Truman instructed the other players to be sure that he lost but not too badly. Several hands were thrown, and Churchill left the train only $250 poorer.

While Mr. Clifford is usually associated with his role in the Government, he served in it for fewer than six years. In this he is emblematic of a special breed of Washington lawyer-lobbyist. They wield great influence because of their familiarity with how the Government works, and are paid handsomely to see that a law or regulation favors a client.

Business executives typically find Congress and the Federal bureaucracy a puzzling, chaotic institution. It is in this area that Mr. Clifford's rich resume and dazzlingly confident manner have served him well.